Next Insurance becomes a ‘one stop shop’ for business cover
Now with coverage options ranging from business personal property to building and equipment breakdown cover, the company is calling its comprehensive product portfolio “a significant milestone.”
At a time when small businesses are seeking to transition from the uncertainty of COVID-19 to a more even footing, Next’s platform - which also includes , , and - will be an important asset for those needing support.
“When we started Next Insurance we knew we could better serve the small business community by offering a digital one-stop-shop where owners could buy all of their insurance needs in one place,” commented Guy Goldstein, CEO.
“The addition of commercial property policies rounds out our full suite of coverage and achieves our goal of becoming a one stop shop for small business insurance.”
Insurance throughout the US
Next currently offers insurance to residents in 41 US states, and it’s not unreasonable to consider that further growth may be on the horizon.
Earlier in the year, the company announced a successful that doubled its value to over $4bn. This was the latest in a series of achievements across the last 12 months, which also included tripling its number of premiums and adding 180 new staff.
Regarding the influx of support for Next’s vision, Goldstein stated, "This latest round of financing is a validation of our vision which is to make it dramatically easier for small business owners to get the insurance coverage they need by removing friction from the customer experience.
“We're not done improving the lives of small business owners, but we're proud of what we've accomplished thus far."
Image source: Next Insurance
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.